Development of the Water Smart South Africa TIMES model: SATIM-W

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1 Development of the Water Smart South Africa TIMES model: SATIM-W Development of a National Water-Energy System Model with Emphasis on the Power Sector Fa diel Ahjum, Bruno Merven a nd Adrian Stone James Cullis a nd Nicholas Wa lker Gary Goldstein and Pat Delaquil w w w. e r c. u c t. a c. z a The methodology is part of the Thirsty Energy Initiative of the World Bank. It cannot be quoted or used for now the info belongs to the Bank and the activity has not been finalized. Financing is from ESMAP and also from the WPP, part of the Water Global Practice. The author s views expressed in this publication do not necessarily reflect the views of the World Bank. P r e s e n c e a t I E W m a d e p o s s i b l e w i t h t h e h e l p o f M A P S 1

2 South African energy economy at a glance Economy is coal-based: 80% of primary energy supply 90% of electricity supply 30% of liquid fuels supply National CO2e emissions (2010) ~ 500Mte: Power Sector responsible for 60% Coal-synfuel facility responsible for 10% - Largest point source emitter in southern hemisphere Energy Security concerns and Climate Change policy leading to INDC deliberations looking at: Increasing interest in expanding the nuclear fleet from the existing 1.9 GW A shift towards Renewable Energy alternatives with emphasis on Solar-PV, Solar-thermal and Wind Potential for local shale-gas supply Modelling the water-energy nexus in South Africa 2 2

3 Water-Energy Planning in South Africa Department of Energy Energy planning conducted at the national level Integrated Energy Plan Integrated Resource Plan (Eskom) Future coal capacity under different demand scenarios Department of Water and Sanitation Water planning conducted regionally with different scenarios of future water demands Assessment of Future Marginal Cost of Water in SA Assessment of Future Marginal Cost of Water in SA: Vaal River Augmentation Options Separate studies may not capture the full water-energy linkage. SATIM-W is addressing this shortcoming by integrating the water and energy supply chains from source to end-use. Modelling the water-energy nexus in South Africa 3 3

4 South African Water-Energy Context South Africa is an energy constrained country facing the double dilemma of aging infrastructure for both power and water supply Mining, 2.50% Industry, 3% Municipalrural, 3% Electricity, 2% Municipalurban, 24% Irrigation, 60% ~90% of population with access to electricity Operating dry-cooled plants since the late 1960s Zero Liquid Effluent Discharge policy at existing coal power plants Existing net capacity of dry-cooled units is approximately 9,700 MW (ca. 30% of total capacity) Existing water supply systems at or approaching capacity: 97% of existing supply allocated Other, 5.50% Estimate of sectorial water use Modelling the water-energy nexus in South Africa 4 4

5 South African Water-Energy Network Water for power supported by major inter-basin transfers The transfer and treatment of water is very sensitive to energy costs 5 Modelling the water-energy nexus in South Africa 5

6 South African TIMES model (SATIM) Simplified Representation of Water In its previous form, SATIM was a single region national representation of energy commodity flows, energy transformation technologies and the incurred costs. In SATIM only water consumption by the Power Sector is represented by including the water use intensity of power plants. The implementation did not consider regional disparities in water supply and costs and did not include auxiliary water usage by nonelectricity generation technologies such as coal mining. 6 Modelling the water-energy nexus in South Africa 6

7 Incorporating Water Supply Infrastructure in SATIM-W Introduce water commodities that represent water quality types or levels. The two distinct water treatment types refer to two water commodities that are required by consumers: Basic quality or Primary treated water, and High Quality (HQ) demineralised water for boiler feed water make-up Split single region model using naming conventions to align with the Water Supply Regions (WSR) Technologies are designated by region and end-use water type Higher quality end-use water requirements can be transformed via treatment technologies, lower water quality demand such as agriculture can be supplied via mixing technologies that are less discriminate (costly) Cost components of the water supply options determine the Marginal Water Supply Cost Curve (MWSCC): Scheme Costs = Capital + Fixed_OM1 + Var_OM (Energy cost of conveyance (endogenous)) + Fixed_OM2 (Administrative charges) 7 Modelling the water-energy nexus in South Africa 7

8 Incorporating Water Supply Infrastructure in SATIM-W Supply Demand Water transformation Water transfer A TIMES model can be readily adapted to track water requirements for energy (and vise versa), either by representing exogenously prepared (MWSCC) or depicting to full infrastructure build-out options available The water subsystem is introduced into SATIM-W by means of explicit water supply and infrastructure options for each of the (WSR) where major energy facilities are found, and their associated energy consumption (e.g. electricity for pump-stations or diesel for truck transport) 8 Modelling the water-energy nexus in South Africa 8

9 Reference Energy-Water System (REWS) as depicted in SATIM-W Modelling the water-energy nexus in South Africa 9 9

10 Regions of Expected Energy Sector Growth Location of power generation plants in the country along with the regions of interest for the water-energy dimension of the power sector Colour-shaded areas depict the country s primary surface water drainage basins or catchments 10 Modelling the water-energy nexus in South Africa 10

11 Demand Growth Assumptions Mm3 Waterberg: Region Region A A Mm3 Olifants: Region Region B B Mm3 Upper Region Vaal: Region C C Mm3 Orange: Region Region D D Water demand is at present exogenous, with explicit allocations for non-energy consumption Average 3% per year GDP growth is the main driver for the demand for energy 11 services which must be met by SATIM-W Modelling the water-energy nexus in South Africa 11

12 Modelling the Future: Scenario Factors Water Availibility Water supply yield Cost of utliisation (supply &treatment) Climate Impact Water intensity of use CO 2 cap/price Hydro imports RE & Nuclear options Economic outlook Discount rate Water & energy demand Technology costs Fossil Fuel Resource Utilisation Coal and domestic shale gas exploitation Synthetic fuel refineries and power sector Environmental Wastewater treatment Air emission controls (FGD) Themes explore the interaction of the various factors that would influence planning decisions in the energy supply sector from a water and energy perspective 12 Modelling the water-energy nexus in South Africa 12

13 The Spatial Variation of Water Supply (and Demand) is an Important Driver of Regional Water Supply Planning Region A Region B Region 5 (biofuels) Region C Region D (Cullis et al, 2015) 13 Uncertainty of regional average annual bulk water supply due to Climate Change by 2050 Modelling the water-energy nexus in South Africa 4

14 Scenario Matrix for Cases Preliminary Analysis Scenario Area SATIM-W Scenario Matrix Shale gas Drier Climate / Water Stress Environmental compliance CO 2 cap / limit / tax Scenario Description Shale gas extraction limited to 40 tcf otherwise Drier climate: increasing nonenergy water demand and reduction in water supply FGD retrofit to older coal power plants. New build plants are assumed to be built with Wet-type FGD. A cumulative CO2 cap set at 10/14Gt by 2050 Scenario Indicator S D E C/L/T# Case Description Case Name Reference (no shale) BAU SOOO ODOO OOEO S_OOOC# No Water Cost (no shale) Add: SUP_WAT-NIL Shale BNW S_NWC# S_SOOC# Drier Climate SDOO ODEO S_ODOC# Environ. Compl. SOEO S_OOEC# Drier Climate and Environ.Comp. SDEO S_ODEC# Shale, Drier Climate and Environ.Comp. S_SDEC# 14 Modelling the water-energy nexus in South Africa 13

15 Why Cost Water for Energy Supply? Without a cost for water, new coal power plants employ Wet Cooling, but when water costs are applied there is a shift towards Dry Cooling and Solar Thermal Not including a cost for water lowers total system cost by building more coal-fired power plants instead of renewables, but results in an 80% increase in water consumption for power generation while producing 2% more CO 2 15 Modelling the water-energy nexus in South Africa 14

16 Reference case: Energy Generation and Water Consumption In the later planning periods wet-cooled solar thermal plants are preferred with ~4 GW of new wetcooled coal due to a basic economic benefit of allocating available water to power generation. Modelling the water-energy nexus in South Africa 15 16

17 Reference case: Power Plants Water Consumption by Type Water intensity of coal plants decrease over time while solar thermal increases ten fold due to wet cooling Gas generation remains relatively flat over the planning horizon Modelling the water-energy nexus in South Africa 15 17

18 Reference Case: Regional Water Consumption Waterberg: Region A Olifants: Region B Upper Vaal: Region C Orange: Region D Waterberg is the key water-energy region. Non-energy water demands dominate the other regions In the Olifants energy water needs shrink substantially as existing power plants retire Modelling the water-energy nexus in South Africa 17 18

19 Active Unit: 2010MZAR Active Unit: 2010MZAR Water Infrastructure Investments: Lumpsum Payments Reference Case Expenditure Expenditure Region D Region C Import desalinated seawater Region B Region A Vaal-Crocodile transfer + Delivery Reuse and transfer from Vaal + Delivery MCWAP Phase 2 MCWAP Phase Bulk of water for energy expenditure occurs in Waterberg, where MCWAP Phase 2 is the main expense Potential water shortage in 2050 (as backstop desalination kicks in) Modelling the water-energy nexus in South Africa

20 Water Infrastructure Investments: Annual Payments Reference Case Future expenditure in energy related water infrastructure escalates with growth in the Waterberg (Region A) Modelling the water-energy nexus in South Africa 20 19

21 Power Generation by Scenario Reference continues the country s reliance on coal-fired generation Shale allows a bit more variable renewables into the generation mix Nuclear and renewables are turned to heavily to meet the CO2 cap without Shale 3GW of existing coal capacity is almost stranded in the later years under the CO2 cap Shale delays nuclear to 2040 and eliminates almost all coal generation with the CO2 cap 21 Modelling the water-energy nexus in South Africa 20

22 Water Intensity of Power Generation by Scenario Water intensity of electricity generation exhibits a decreasing trend. Overcapacity from committed builds in the near term results in an increase in water intensity in the mid-term due to the increased utilisation of older (less efficient) wet-cooled plants. A more stringent cumulative CO 2 cap favours less water intensive technologies bringing down water intensity of generation earlier, steeper and deeper, leveling off at about 0.2 litres/kwh. Modelling the water-energy nexus in South Africa

23 Average Cost of Regional Water Supply by Scenario Waterberg: Olifants: Upper Vaal: Orange: In the Waterberg, water supply costs drop in the Reference as more energy projects take up capacity of water infrastructure. The drop is delayed with Shale and doesn t happen with the CO2 cap. Modelling the water-energy nexus in South Africa 23 22

24 Conclusions A TIMES model can be readily adapted to track water requirements for energy (and vise versa), either by representing exogenously prepared marginal water supply cost curves (MWSCC) or by depicting the full infrastructure build-out options available as is the case with SATIM-W and determining the MWSCC endogenously. Both water & energy as part of the national planning process allows for optimal investments decisions in both sectors by identifying potential risks to either water or energy infrastructure planning. For example the potential for abandoned or stranded capital under certain scenarios (e.g. Climate Change induced regional shifts in investment). While this first foray into a comprehensive approach examining the energy-water nexus in South Africa needs further refinement to be ready to advise policy formulation and investment, it is clear that important insights may be overlooked without taking a fully integrated approach to coordinating water and energy planning. Modelling the water-energy nexus in South Africa

25 Planned Model Refinements and Possible Next Steps Water Disaggregate the non-energy water sectors to enable water reallocation to be examine Water-energy cost for other energy supply sectors: hydrogen, uranium mining and processing Impact of water treatment for coal and shale gas mining effluent Impact of regional water quality Incorporate the temporal (intra annual) variation in water supply and demand Energy Add costs for expansion of the transmission lines from remote solar sites Re-examine characterisation of wind options Introduce load balancing requirements as the share of renewables grows Next Steps Breakout non-energy water demands to explore reallocation schemes Link to an economy-wide (CGE) model to realize a comprehensive national energy-water-economy-environment planning framework Modelling the water-energy nexus in South Africa